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TMI Blog2013 (8) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) is justified in law in deleting the penalty levied under section 271(1)(c) of the Income- tax Act, 1961 of Rs. 2,47,59,926 on advances of dormant contracts received prior to the year 2004 amounting to Rs. 7,35,58,890. On the facts and circumstances of the case and in law, whether the learned Commissioner of Income-tax (Appeals) is justified in law in deleting the penalty levied under section 271(1)(c) disregarding the fact that, the advances received by the assessee on dormant contracts was shown under the head 'current liabilities' and were only offered to tax in subsequent assessment years 2008-09 and 2009-10 after the objection was raised by the Assessing Officer. The appellant prays that the order of the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the submissions of the assessee and the assessment order he held that the assessee was showing advances as current liabilities, that same were offered for taxes in the assessment years 2008-09 and 2009-10, that the Assessing Officer was not satisfied with the order in which the income was offered, that he taxed the advances as income for the assessment year 2007-08, that returns for the assessment years 2008-09 and 2009-10 were filed on September 29, 2008 and September 30, 2009 respectively, that issue of advances attracted the attention of the Assessing Officer during the course of assessment proceedings initiated in November, 2010, that the assessee had suo motu offered the advances received from the customers in the subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a). 4. We have heard the rival submissions and perused the material on record. Courts have laid down certain principles that deal with the situations where penalty under section 271(1)(c) of the Act should not be levied. We would like to summarise these broad principles : (i) Imposition of penalty is not automatic. Before imposing penalty it has to be seen that the assessee has contravened the provisions of Chapter XXI of the Act. Not only the provisions of levy of penalty are discretionary in nature, but the discretion is also required to be exercised judiciously. (ii) Penalties under the Act are imposed for some omissions and commissions of the assessee, but his such omissions/commissions have to specifically spelt out in the show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee have been rejected by the Assessing Officer. (vi) If the explanation filed by the assessee about not imposing penalty is not rebutted by the Assessing Officer, the provisions of concealment will not be applicable. (vii) Concealment of income and furnishing inaccurate particulars are different concepts. A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing of inaccurate particulars. (vii) Where estimate made by the assessee is replaced by the estimate of an Assessing Officer penalty should not be levied for filing inaccurate particulars. (viii) There is a difference between a false claim and a genuine claim. In the first case, the fact of incurring of expenditure is missing, whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs before the Assessing Officer made any inquiry about them. The first appellate authority has given a categorical finding about the dates of inquiry initiated by the Assessing Officer and offering of advances for subsequent years and from his order it is clear that the assessee had on its own paid tax on the amounts-in-question. It is not a case where the assessee had concealed the facts of earning of income rather it is a case where the year of taxability of income was in dispute. The Assessing Officer and the assessee had different opinions about the year in which the same should be taxed. In our opinion, in such matters penalty under section 271(1)(c) cannot be levied. Therefore, upholding the order of the first appellate authority, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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